Contract Manufacturing

Contract manufacturing means production services, ordered production, offsite production, and production outsourcing.

 

IOC sp. z o.o. is a production facility that provides manufacturing services exclusively at the customers' demand, which makes what we offer distinct from that of our competition. Therefore, we do not have our own product brands. 

 

We are focused solely on production and we work on the assumption that we are not and will never be in competition with our Clients. Our Clients are the exclusive owners of the products that we manufacture. However, we take full responsibility for all the works related to manufacturing of the product, such as developing the formula, creating the packaging and description conforming to EU requirements, and registration. We certainly allow for the possibility of cooperating in a given scope of services, e.g. manufacturing a dietary supplement with the ingredients indicated by the Client or providing services of encapsulation, blistering, sachetting of the materials delivered by the Client.

 

IOC pracownicyAdvantages of working with a contract manufacturer:

The entity responsible: the contracting party is the entity responsible for launching the product on the market and the sole entity listed on the packaging (the name of our company does not appear on the packaging). 

  • no competition from the manufacturer,

  • exclusive rights (to the product, brand, recipe),

  • discretion (confidentiality agreements are standard procedures),

  • Knowledge and experience in marketing, food sector law, technology, and market expectations.

 




Our clients very often include companies with their own production facilities. Should production or its separate stages be outsourced to outside companies, such as IOC, or should production capability be expanded?

Our Clients very often decide to outsource production instead of buying or expanding the existing machinery. Why is that?

 

 

Convenience and project implementation date

 

It is not only about the investment required in the purchase and renovation of machines (or the premises). Very often the decision to introduce new products (cosmetics, supplements) and the viability of the project depend on the relatively short time of their implementation to the market. It is very time consuming to gain experience related to production in new technology, and training and organising the production team.

Production outsourcing is the lack of necessity to adjust one's organisation to the supervision over new processes.

By outsourcing production to outside companies you can use their knowledge and experience of manufacturing technologies, and also planning, purchasing and control of raw materials, quality procedures, etc.


 

 

Costs saving 

 

When outsourcing, thanks to the economies of scale, the subcontractor incurs lower payments related to the manufacturing process of your products. The organisation and the fixed assets of the subcontractor are transferred to the contract with a negligible increase in fixed assets.

 

To recapitulate, unit costs related to the processing of your order is significantly lower. If you were to start production in your own facility, fixed assets would strain the budget of only one project.

 

 

Freezing the capital

 

When production is to be realized in your own facility, there is a need for additional investments that go beyond the value necessary to implement a given order. For example, the necessity to ensure a stock of raw materials and packaging at a much higher level than required for the implementation of the project. Of course there is a need to use the raw materials and packaging at a later date, but one must consider freezing the capital in the long run. Why not consider investing these resources in the promotion of the image, brand, advertisement and sales support?

 

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